US Consumer Credit Hits All Time High As Credit Card Usage Soars

After a surprising slump in the use of revolving debt in September, when US consumers unexpectedly paid down a total of $310 million on their credit cards, moments ago, the Fed reported that in October, consumer credit posted a huge rebound, rising by $25.4 billion, above the $15.0 billion expected, the highest one month jump since last November. The surge in borrowing in October brought the total to $3.963 trillion, a 7.7% annualized increase from a year ago, and a new all time high, largely on the back of a newfound love with credit cards.

After a one-month dormancy in using credit cards, American consumers returned to doing what they do best - spending money they don't have - with revolving credit jumping by $9.2 billion, the highest monthly increase since last November, and one of the highest monthly increases on record. The monthly increase brought the total to a new all time high of $1.037 trillion.

At the same time, growth in nonrevolving credit, i.e. student and auto loans, was stable and in line with recent months, increasing by $16.2 billion, and also bringing the nonrevolving total to a new all time high of $2.926 trillion.

In other words, while Americans continued to spend on cars and "college", they once again rediscovered their enthusiasm to buy every day items on credit.

And while the rebound in revolving credit use will silence any questions about the resilience of the US consumer heading into the fall, the recent dramatic upward revision to personal savings notwithstanding, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers were at fresh all time highs, with a record $1.564 trillion in student loans outstanding, an impressive increase of $33 billion in the quarter, while auto debt also hit a new all time high of $1.143 trillion, an increase of $19 billion in the quarter.

In short, Americans are drowning even deeper in debt, and loving every minute of it.